from the exaggerations dept

One of the common "defenses" of patents that we often hear is that "investors require them." That's simply not true. There are, certainly, some short-sighted investors who require patents, but more and more of the most respected investors have spoken out against the patent system, acknowledging that it does more harm than good. The latest example of this comes from Rob Pegoraro, who spoke to a bunch of startups presenting at a "Demo Day" and asked each of them about their patent strategy.

While some of them are filing for their own patents, a key point was that their investors definitely didn't require it or push them in that direction.

None said their investors had pushed them to file for patents.

Even more to the point, investors seem to recognize that patents can take a big chunk of money out of early investment if startups file for a patent. Fortify Ventures managing director Jonathon Perrelli pointed out:

“When they’re raising $50,000 to pay for ramen and hosting services and their desks, $15,000 doesn’t have to go to intellectual property.”

The article also asked the startups if they were worried about patent trolls, and, unfortunately, many of the startups seemed fairly naive about the whole thing, suggesting that they're okay since they're not copying anything. That's not how patent law works, of course. Patent trolls pop out of the woodwork claiming you violate some tiny thing all the time. The one company that Pegoraro spoke to that insisted it was impossible that they violated a patent is likely in for a big surprise if it ever gets big enough to attract patent troll attention.

from the urls-we-dig-up dept

In the wake of the Great Recession, many young adults are still having a hard time finding jobs. The recent unemployment rates for young adults (age 20 to 24) is about 13%, which is much higher than the rest of the adult population. Even worse, it seems like young workers (even college graduates) are increasingly taking low-wage jobs. Perhaps it's time for our youth to consider taking a chance and going into business for themselves. Here are a few links that might help convince them to take the plunge.

from the time-to-fix-the-problem dept

Most people used to think that patent trolls tended to focus on bigger companies -- those with huge bank accounts who'd rather pay the troll off than deal with a lawsuit. But over the last few years, we've been hearing more and more stories about startups hit by patent trolls, who are taking advantage of the fact that a patent lawsuit -- win or lose -- would almost certainly kill the company. One common tactic? Wait until a startup announces a round of fundraising and then pounce -- knowing that the company (a) has some money and (b) has little time to deal with a lawsuit. Finally, this issue is getting some attention. Crain's recently had a piece on patent trolls going "downmarket" after startups, which has some quotes from startup execs (many who want to remain anonymous to avoid further attacks). One of whom is actually fighting the troll:

"I have more lawyers than I have employees," said the entrepreneur, who asked to remain anonymous for fear he would be the target of even more lawsuits.

That entrepreneur noted that he's stopped paying himself a salary, and his legal bills ($50,000 per month) were rivaling his overall payroll of $63,000 per month. But he's fighting the troll on principle.

But, of course, even if he wins, he's not going to get that money back:

Young companies that are looking for venture capital are most likely to settle, so goes the conventional wisdom, because they have limited cash and worry that a lawsuit will scare off investors. It's cheap to bring a lawsuit, but expensive—$2.5 million on average—to defend against one. Not surprisingly, the majority of patent suits are settled out of court.

"The system is so stacked against me," said the e-commerce entrepreneur. "To prove I'm right, it will cost me more money than I have raised in my company's existence. If I win, I don't get the money back, and if I lose, I owe triple damages."

This is part of the reason why the SHIELD Act would be a useful step. While there are still many, many problems with patent trolling, at least it would make it possible to go after trolls for legal fees when the trolls lose.

from the urls-we-dig-up dept

There are plenty of marketing gurus who will advise company founders to choose names and logos very carefully -- making sure to avoid confusing names or names without the appropriate gravitas. Then again, there are several companies with names that break the rules.

from the as-long-as-they-don't-drop-vowels dept

We've discussed a few times in the past Rep. Darryl Issa's Madison platform for crowdsourcing ideas around legislation. Over the last few months he's used it to create a productive discussion around the OPEN Act, the more reasonable alternative to SOPA/PIPA, and also used it to post the text of ACTA for discussion. While the platform may need some tweaking and advancement, it's still quite a feat to see someone in Congress actually innovating, and that should be encouraged. Joshua Lamel -- who admits that he's politically at the other end of the spectrum from Rep. Issa -- has a really nice profile of how Issa is trying to treat his job in the House like a "lean startup," with projects like Madison. It is a bit of a slog going up against the entrenched ways that Congress acts today, however:

"I try to bring a lean startup mentality to my work making government more efficient, open and participatory," he said.

"This technology-centered approach, however, is disruptive to the government bureaucracy and many in Congress because it demands experimentation, data-driven analysis and actually listening to our users -- the American people -- about how to make government work better for them. That's why social media and innovation are so central to my work: we in Congress do not have all the answers, but we can have a relentless drive to adapt technology to let taxpayers re-engage with government on their own terms. I firmly believe that just as new technologies are revolutionizing nearly every aspect of life in America, nascent tools like Madison show the transformative impact technology will have on government, and ultimately overcome the inertia of the bureaucracy."

While not a traditional industry, it sure seems like Congress could use some significant disruption -- and having people in there treating it like a startup might just be a good way to start.

from the join-in dept

As we announced recently, we're now featuring and highlighting startups who want feedback on what they're working on over at our Step2 discussion platform. The latest startup to take part is Sprinklebit, an online investment/trading community that is looking for feedback on what you would like to see in an online investment community. There's already a good conversation going on at the discussion page.

Separately, we've already received a bunch of requests to take part in future Step2 Startup posts, but if you've got a startup and want to get feedback from the Techdirt/Insight Community, please send us a note (use the "Step2 Startups" option in the pulldown).

from the keep-it-going dept

We've been working to do more with our Step2 discussion platform lately, and today we're announcing Step2 Startups -- in which various startups reach out to the Techdirt community for feedback/thoughts/advice. Step2 has already been set up for people, creators, entrepreneurs and innovators, but now we're starting to specifically highlight interesting startups that are asking for feedback from the community. The first participant is the startup Snackr, "The Pandora for Audio News".

A little over a year ago I was blown away by Paul Ford's brilliant essay entitled The Web Is a Customer Service Medium. It inspired me to write a post about the key idea in the essay: that the killer app for the web is providing the answer to the "Why wasn't I consulted?" question -- simplified to WWIC. Since then I've spoken dozens of times about WWIC in the context of building communities and navigating digital challenges.

The key to building communities really is to focus on the WWIC question -- and that was a big part of our thinking when we set up Step2. The platform was initially focused on business models and ideas for content creators, but the plan has always been to expand it to cover more and more useful concepts. We'd noticed that our community has a lot of opinions and insights into various new online tools and services. Any time we mention anything on Techdirt, people get into pretty detailed and involved discussions, and we thought we should leverage that with Step2. At the same time, we get tons of requests from PR folks or startup entrepreneurs themselves (we definitely prefer to hear from entrepreneurs directly over their hired-gun PR people) hoping to get coverage on Techdirt. Doing straightup "this startup is launching today" stories isn't really our bread and butter -- unless it fits into a larger trend we're looking at, it just didn't seem to be of much value. Plus, there are dozens of blogs doing that kind of thing.

But what we could do is help startups get feedback and insights from our opinionated and thoughtful community. We could help make sure you folks "were consulted" on various interesting new tools and services. Hence Step2 Startups -- where we'll be highlighting various startups that request feedback and thoughts from the community here. Step2 is an open platform, so any company can just post their questions directly and seek feedback, but if you want to be featured on Techdirt as well, like Snackr here, we ask that you hit us up via the feedback form. If it's appropriate, we'll work with you to find an interesting question on which the community is likely to have thoughts.

from the go-disrupt dept

For a few years now, we've been attending and/or partnering with Midem, the big music industry conference. The same folks are now also doing MIPCube, a similar conference focusing on TV and video. We're partnering with them on their MIPCube Labs event, similar to the equivalent program at Midem, where a bunch of startups get to present their disruptive ideas, and the ones voted the best by a panel of judges will win some awards. If you're involved in an innovative or disruptive startup that is changing the face of video, TV or film, you should apply to take part -- and hurry up since you have to apply by February 29th (I know that link says the 20th, but it's been extended!):

MIPCube Lab is the only start-up competition to be tightly integrated into the TV industry and its future. It provides a global platform for start-ups to get feedback from the most powerful and innovative decision makers in the TV business and obtain funding from the finance community.

Having seen the Midem Labs competition evolve and grow over the years, and seen lots of great companies present through there (including folks like Kickstarter and SoundCloud), these events can be really worthwhile for startups, so check it out.

from the destroying-business dept

The federal government has been paying lip service to the idea that it wants to encourage new businesses and startups in the US. And this is truly important to the economy, as studies have shown that almost all of the net job growth in this country is coming from internet startups. Thankfully some politicians recognize this, but the federal government seems to be going in the other direction. With the JotForm situation unfolding, where the US government shut down an entire website with no notice or explanation, people are beginning to recognize that the US is not safe for internet startups.

3. Migrate DNS, web serving and other critical services to non-US based servers.

4. Migrate yourself to a non-US controlled country.

I'm sorry for US sites and users. Your government is hell-bent on turning the internet into a read-only device like TV, easily regulated and controlled. The population will be required to sit quietly and keep their eyes glued on the screen so they don't miss the ads, with any infringers deemed terrorists and pedophiles and thus deserving of summary punishment by DHS squads.

Hopefully the internet will route around the damaged segment, and the rest of us can continue to enjoy the amazing interactivity it has brought our society.

What's amazing is the "what's the big deal?" attitude the government has taken to all of this. For most of us, this situation is shocking. The US government should never be able to flat out shut down a business with no notice or explanation, only to say "sorry" a couple days later. It's done this in the past and insisted that it would be more careful in the future. So far, it doesn't appear to be living up to that promise. While these may be "mistakes," the wider impact should be frightening to federal officials. They're now actively scaring startups away from US businesses at a time when they should be doing exactly the opposite.